Tata Motor's Q2 net triples to Rs2,480 cr on zooming JLR sales

09 November 2017

Tata Motors reported its biggest profit jump in six quarters on the back of rising sales at its British luxury car brand Jaguar Land Rover. Tata Motor's profit almost tripled to Rs2,480 crore ($382 million) in the July-September quarter, up from Rs830 crore a year earlier, on the back of a better product mix. according to a filing.

Tata Motors said consolidated revenue (net of excise) stood at Rs70,156 crore in Q2FY18 against Rs63,577 crore for the corresponding quarter last year, though lower by Rs2,393 crore due to conversion impact from pound to rupee.

Consolidated profit before tax for the quarter was Rs3,081 crore, against Rs999 crore for the corresponding quarter last year. Consolidated profit after tax (post profit / loss in respect of joint ventures and associated companies) for the quarter was Rs2,502 crore against Rs848 crore for the corresponding quarter last year, though lower by Rs112 crore due to conversion impact from pound to rupee.

Tata Motors reported a 10 per cent growth in its consolidated net revenue for fiscal second quarter at Rs70,156 crore and a 195 per cent growth in consolidated after-tax profit (PAT) at Rs2,502 crore, according to a filing.

Tata Motors said it 'turnaround' plan has started to deliver with strong topline growth in MHCV, ILCV, SCV and pick-ups, complemented by favorable product mix and accelerated cost reduction efforts.

Passenger vehicles continue to build positive momentum on the back of new product launches and customer centric initiatives.

Jaguar Land Rover business saw strong customer demand for Range Rover Velar and other new models which led to higher sales and higher profitability, the company said.

For the half year ended 30 September 2017, Tata Motors reported consolidated revenues of Rs128,807 crore against Rs128,692 crore for the corresponding period last year. Consolidated profit before tax (before exceptional item) was Rs3,198 crore against Rs3,071 crore for the corresponding period last year. After exceptional items, the consolidated profit before and after tax (post profit / loss in respect of associated companies) for H1FY18 was Rs6,818 crore and Rs5,702 crore, respectively, as against Rs3,551 crore and Rs3,109 crore, for the corresponding period last year.

Standalone sales (including exports) of commercial and passenger vehicles stood at 152,979 units in Q2FY18, a growth of 13.8 per cent, compared to Q2FY17, with an impressive growth across segments – 28 per cent in MHCV, 35 per cent in ILCV, 38 per cent in SCV and pick-ups. The passenger vehicles grew by 14.4 per cent versus the corresponding quarter last year.

Revenues (net of excise) for Q2FY18 stood at Rs13,400 crore, compared to Rs10,311 crore for the corresponding quarter last year, a growth of 30 per cent. Operating profit (EBITDA) for Q2FY18 was Rs971 crore against Rs336 crore for Q2FY17, a growth of 189 per cent, with operating margin for Q2FY18 at 7.2 per cent.

Loss before and after tax for the quarter was at Rs266 crore and Rs295 crore, against loss before and after tax of Rs609 crore and Rs631 crore, respectively, for the corresponding quarter last year.

For the half year ended 30 September 2017, revenue stood at Rs22,607 crore against Rs20,704 crore for the corresponding period last year, a growth of 9 per cent. Loss before tax for H1FY18 was Rs733 crore against Rs571 crore for the corresponding period last year. Loss after tax for H1FY18 was Rs762 crore against Rs605 crore for the corresponding period last year.

Tata Motors said its business transformation initiative undertaken to accelerate growth momentum and to bring the business back to profitability, has started yielding results.

With Q1 performance below expectations, Tata Motors witnessed a month-on-month growth in sales and market share in Q2 outperforming the industry and reaching highest sales in September 2017 in PV since November 2012 and in CV since June 2014.

The commercial vehicles business market share grew by 1.7 per cent year-on-year and 3.9 per cent sequentially on the back of newly launched products, increased acceptance of SCR technology, improved stakeholders' engagement and aggressive market activation, well complemented at back end by steep ramp-up of production.

In passenger vehicles business, new products like Tiago, Tigor and Hexa continue to drive sales momentum. Tata Nexon, the newly launched compact SUV has received overwhelming response from the market and added to the positive excitement.

''After a challenging first quarter, Tata Motors has demonstrated impressive results with month-on-month growth in sales and market share, enabled by a slew of new product launches and customer centric initiatives. With our turnaround plan in full action, we are seeing encouraging results and we will continue to drive sustainable profitable growth to meet our future aspirations,'' Guenter Butschek, MD & CEO of Tata Motors, said.

Second quarter retail sales of Jaguar Land Rover Automotive PLC rise 5 per cent to 149,690 units year-on-year reflecting continued ramp-up of new models such as the Range Rover Velar, Land Rover Discovery, Jaguar XF Sportbrake, Jaguar F-PACE and, in China, the Jaguar XFL.Strong customer demand for Range Rover Velar and other new models.

Retail sales grew 5.1 per cent to 149,690, with increases in China (27.4 per cent) and the US (5.1 per cent) offsetting lower sales in the UK and Europe. EBITDA margin was 11.8 per c4nt and EBIT margin was 5.2 per cent in the quarter.

''We have delivered solid growth in quarterly profit and revenues amid rising demand for our award-winning products. Although we are facing headwinds and uncertainty in some markets, Jaguar Land Rover is well positioned to deliver further global expansion,'' Ralf Speth, Jaguar Land Rover chief executive officer, said.

As part of the company's ongoing product offensive, manufacturing expansion and new technology programme, Jaguar Land Rover's investment spending was more than £1 billion in the second quarter. Investment spending for the full year is expected to exceed £4 billion.

"Our expanding product portfolio continues to excite and surprise; coming this next quarter customers have the all-new Jaguar E-PACE and new plug-in hybrid Range Rover and Range Rover Sport to look forward to as well as a key new model from our China joint venture. Looking ahead to the rest of the year, we will continue to focus on our strategic objective of achieving profitable, sustainable growth and will continue to adapt and innovate in the current challenging market conditions,'' Ralf Speth concluded.

For the half year ended 30 September 2017, retail sales were 287,153 units. Revenues stood at £11.9 billion while pre- tax profit was £980 million (including one time of £437 million relating to changes made to pension plans in Q1 FY 18).

For H1FY18, net revenues were KRW 484.0 billion (approx Rs2,759 crore), a decline of 4 per cent against the corresponding period last year and net profit was KRW 30.8 billion (approx Rs176 crore), a 49 per cent jump from H1FY17.